South African Trade Policy and the Future Global Trading Environment

The document argues that South Africa's current trade policy is too defensive and focused on domestic industrial concerns, leaving its exporters disadvantaged in fast-growing emerging markets. It identifies key global trends—including the shift of growth toward BRIC economies, the re-orientation of Chinese demand toward domestic consumption, and the rise of regional trade agreements—that necessitate a strategic shift. The authors propose diversifying exports, simplifying tariff structures to facilitate free trade agreements, establishing duty-free export zones to attract global supply chains, and deepening integration within Africa to leverage the region's growth.

• South Africa's current trade strategy is characterized as inflexible and overly focused on domestic needs, which risks disadvantaging exporters in emerging economies and creates tension with the broader African region.
• The global economic locus is shifting from industrialized to emerging economies; the share of emerging economies in world GDP (PPP) rose from 20% in 2000 to 35% in 2011, with projections reaching nearly 60% by 2020.
• A re-orientation of the Chinese economy from investment-led to consumption-led growth is expected to increase demand for services, agriculture, and food, while reducing demand for mining- and resource-intensive products.
• South Africa faces significantly higher tariff barriers when exporting to emerging economies compared to developed ones; for example, average applied tariffs to BRICs range from 8.37% (China) to 12.4% (Brazil), while the EU rate is 0.26%.
• The authors argue that South Africa's reliance on partial trade agreements is ineffective, as evidenced by the SACU–Mercosur agreement where high preference margins were granted to products already facing low MFN tariffs, while major exports received no preferences.
• To compete in global manufacturing supply chains, South Africa could establish duty-free processing zones in rural and coastal areas, particularly in former Bantustan areas, to leverage low-wage potential and attract investors in sectors like electronics.
• The document cautions against an over-emphasis on mineral beneficiation, noting it is often capital-intensive, creates fewer jobs per dollar of output than other manufacturing, and has high energy and emission demands.
• There is a strategic tension between South Africa's desire for national policy space in setting tariffs and the requirement to operate within a SADC Customs Union (CU) featuring a common external tariff.

APA

Edwards, L., & Lawrence, R. (2012). South African Trade Policy and the Future Global Trading Environment. South African Institute of International Affairs. https://saiia.org.za/wp-content/uploads/2012/12/Occasional-Paper-128.pdf

Chicago

Edwards, Lawrence, and Robert Lawrence. South African Trade Policy and the Future Global Trading Environment. South African Institute of International Affairs, 2012. https://saiia.org.za/wp-content/uploads/2012/12/Occasional-Paper-128.pdf.

Wikipedia

{{cite report |last1=Edwards |first1=Lawrence |last2=Lawrence |first2=Robert |title=South African Trade Policy and the Future Global Trading Environment |publisher=South African Institute of International Affairs |date=December 2012 |url=https://saiia.org.za/wp-content/uploads/2012/12/Occasional-Paper-128.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{edwards2012south, author = {Edwards, Lawrence and Lawrence, Robert}, title = {{South African Trade Policy and the Future Global Trading Environment}}, institution = {South African Institute of International Affairs}, year = {2012}, month = dec, url = {https://saiia.org.za/wp-content/uploads/2012/12/Occasional-Paper-128.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }